Why BioMarin's Pipeline Could Be Worth $4 Billion-Plus

Credit Suisse issued a report on BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) and initiated coverage on the company due to strength seen in their drug pipeline. Credit Suisse rates BioMarin as Outperform with a $110 price target.

Analysts Alethia Young, Eliana Merle and Grant Hesser highlighted the pipeline potential of Biomarin saying, "Pipeline could be worth ~$4.1B unadjusted with Hemophilia A Gene Therapy...BioMarin currently expects to sell close to $1B in current products...we assume $2.4B adjusted sales for our base case scenario."

Credit Suisse noted that BioMarin has many potential drugs looking for approval including Kyndrisa, PEG-PAL and Battens, which analysts estimate could bring sales of $1.5 billion. If the drugs are approved, this will allow BioMarin to drive top line growth and achieve market share in the very competitive rare disease treatment market.

Another positive catalyst for BioMarin is the opportunity for margin expansion as the company could see large pricing power with the possible success of the drugs in their pipeline. By addressing a market that is in need of drugs for treatment, BioMarin would have the ability to sell the drugs for a high premium.

Analysts note that BioMarin does face challenges in the near-term including the possibility of setbacks in their drug approval process. However, with the depth of their pipeline, this risk is slightly mitigated.

Shares of BioMarin recently traded at $81.04, up 1.9 percent.